22nd Edition (12-18 September2011)

RBI warns of downside risk to GDP growth outlook

The Reserve Bank of India warned that the risks to the 8 per cent GDP growth projection for 2011-12, made in its July review, are on the downside. In its midquarter monetary policy review the central bank has attributed the downside risk to the growth projection to weakening global demand and the slowing down of domestic demand, to which the monetary policy stance is also contributing. Although India's exports have performed extremely well in the recent period, this trend is unlikely to be sustained in the face of weakening global demand. GDP growth decelerated to 7.7 per cent in Q1 of 2011-12 from 7.8 per cent in the previous quarter and 8.8 per cent in the corresponding quarter a year ago. Agricultural growth has accelerated, but industry and services have decelerated, the RBI said. According to the bank, inflation remains high, generalised and much above its comfort zone of 4.0-4.5 per cent. The inflation reading for August was 9.78 per cent. Pointing out that there is an element of suppressed inflation', the RBI said though global oil prices have moderated, the pass-through to domestic prices remains incomplete. Food inflation, which is at near-double digit levels despite normal monsoons, underlines the fact that it is being driven by structural demand-supply imbalances and cannot be dismissed as a temporary phenomenon, the central bank said. The RBI is of the view that a premature change in its policy stance could harden inflationary expectations, thereby diluting the impact of past policy actions. It is, therefore, imperative to persist with the current anti-inflationary stance. Market experts say the RBI may not pause in its interest rate hike cycle till it gets inflation within the comfort zone. As monetary policy operates with a lag, the RBI observed that the cumulative impact of policy actions should now be increasingly felt in further moderation in demand and reversal of the inflation trajectory towards the later part of 2011-12. The RBI expects the 0.25 percentage points hike in repo rate to reinforce the impact of past policy actions (it has hiked the repo rate 12 times in the last 18 months cumulatively by 3.50 percentage points to 8.25 per cent) to contain inflation and anchor inflationary expectations.

The gulf between the question you want to ask and the question you can answer is often unbridgeable.

INSIDE THIS ISSUE:

CORPORATE watch ECONOMY watch INDUSTRY watch FACT OF WEEK INTERVIEW ZARGONOMICS COLUMNIST JOB watch ENTREPRENEUR

THE DERRICK

CORPORATE WATCH
INFOSYS IN ADVANCED TALKS TO BUY US COMPANY FOR $450-500 MILLION
Infosys Limited, India's second largest software exporter is in advanced talks to buy a US firm for $450-500 million. The target company operates in the public services and healthcare space and has revenues of over $300 million but less than $500 million. However, the sources refuse to divulge the name of the target company. This will be a very big step for Infosys; public services and healthcare especially is an area where its competitors such as Cognizant have been very strong if the buyout goes through, it will be Infosys' biggest acquisition in history. Infosys has been in the focus for quite some time now with analysts and investors raising questions about its huge cash pile and how the company really plans to utilise that. Infosys for now says that it cannot comment on market rumours but sources on the status of this acquisition say that it is almost a done deal.

AUDI AIMS TO OVERTAKE MERCEDES-BENZ THIS YEAR SAYS CHIEF RUPERT STADLER
Volkswagen's premium car brand Audi aims to overtake Daimler's Mercedes-Benz this year by racking up sales to 1.3 million vehicles. The company claimed that it will surpass Mercedes this year and move up from position No. 3 to number 2. Audi was also upbeat on the economic outlook for the automotive industry. There are two early warning signals. One is fleet sales, the other used car sales, and in neither we currently recognize any headwinds.

FORTIS HEALTHCARE TO CONSOLIDATE, BUYS S'PORE ARM

Malvinder and Shivinder Singh-promoted Fortis Healthcare India and also announced that it would acquire Singapore affiliate Fortis Healthcare International Pte Ltd in an all-cash deal as part of a consolidation of its domestic and global operations. The board of directors approved the acquisition move. The valuation for this will be advised by an independent agency. After the consolidation, Malvinder Singh, who is group chairman, Fortis Healthcare, will take over as executive vice-chairman of the combined entity. His sibling Shivinder Singh, managing director, Fortis Healthcare India Ltd, would take over as executive vice chairman. The total revenue of the combined entity would be in the range of $1 billion. The demand for better healthcare is rising significantly in the Asia-Pacific region due to increased urbanisation, and the group would cash in on the opportunity. After the consolidation exercise, the combined entity will have over 74 hospitals, more than 12,000 beds and 580 primary care centres. The company would make a total investment of $1 billion in the next three years, which would be a mix of equity and debt.

RENAULT HEADS FOR PHASE 2 OF INDIA STRATEGY WITH MASS MARKET MODELS
Renault is now gearing up for the second phase of its India market strategy - competing in the mass market for volumes with localised models. The first phase was completed this month by establishing its brand in the premium car market with the Fluence sedan and Koleos SUV. According to a company dealer, the fifth product due late next year is a new sedan positioned between the Volkswagen Vento and the Swift Dzire. In all, 12 products are likely to come in by 2014. Their target is to reach one lakh units by 2013. The two new vehicles will have above 60 per cent localisation and India will be the first market for this small car. The strategy of the first two models, manufactured from imported kits at its Chennai alliance plant with Nissan, was to build a

premium and aspirational brand. The top-down entry plan was especially to undo the brand damage from the negative publicity received from its first product, Logan.

PSL ARM GETS RS 270-CRORE PIPELINE ORDER

Pipe maker PSL Ltd said its US subsidiary has bagged orders worth Rs 270 crore from large US-based pipeline operators for shale gas transmission projects. PSL manufactures pipes for transporting hydrocarbon products, water products and structural steel applications. The Mississippi-based PSL North America (PSLNA) would supply large-diameter API-certified pipes totalling an estimated 105 miles in length. These pipes from special steel with anti-corrosion coating for shale gas pipeline projects being developed in both Southern and North-Eastern parts of the US, PSL said in a statement. Enhanced shale gas expansion activities signal a pickup in demand for pipeline-related infrastructure throughout the country, and PSLNA expects to play a significant role in facilitating the progression of this market. Production against these orders is expected to commence shortly, and is required to be completed within the course of the current financial year.

TVS LAUNCHES LIMITED EDITION OF STAR CITY

Two-wheeler manufacturer TVS Motor Company has launched limited edition of its bike 'Star City', bearing the signature of brand ambassador and Indian cricket team captain Mahendra Singh Dhoni. The limited edition bike is equipped with new graphics, contemporary design, and is being launched along with a new, festivalbased advertisement featuring Dhoni and his wife Sakshi. "It is the first time that they have been cast together in any advertisement. We needed to bring in the element of toughness while portraying festivity, which is so much a part of our culture," TVS Motor Company President (Marketing) H S Goindi said. This limited edition bike comes with a five-year warranty.

RIM sales goes down, net dips 59 %

Research in Motion Limited (RIM), the maker of BlackBerry smart phones, has reported a nearly 59% decline in net income to $329 million for the three-month period ended August 27. The company had posted a net income of $797 million for the June 28-August 27 period last year. Revenue for the June 28-August 27 quarter of the 2012 fiscal stood at $4.2 billion, down nearly 9% from $4.6 billion in the same quarter last year. During the quarter, RIM shipped approximately 10.6 million BlackBerry smart phones and approximately 200,000 BlackBerry Playbook tablets. The company has launched a range of BlackBerry 7 smart phones around the world during the latter part of the second quarter and also seeing strong sell-through and customer interest for these new products. Overall unit shipments in the quarter were slightly below our forecast due to lower than expected demand for older models. The company's total cash, cash equivalents, short-term and long-term investments amounted to $1.4 billion as of August 27, 2011, compared to $2.9 billion at the end of the previous three-month period. Going ahead for the third quarter of the 2012 fiscal ending November 26, 2011, the company expects revenues to be in the range of $5.3-5.6 billion. BlackBerry Smartphone shipments in the August 28-November 26 quarter are estimated to grow between 27-37% vis-a-vis the second quarter.

THE DERRICK

ECONOMY WATCH
CHINA HAS 5 YEARS FOR FINANCIAL REFORM: IMF
The International Monetary Fund estimates that China has five years to reform its financial system to keep it effective. Without reform China risks that significantly low interest rates will promote investment bubbles, particularly in the housing market. Mr. Nigel Chalk, IMF mission chief for China described the Chinese financial system as very bank-based, fed by very high savings, and tightly controlled by the government. Its highly regulated in the sense that interest rates are determined by the Government directly and the exchange rate is highly managed. The states control of the system, useful so far to boost Chinese economic growth and to contain inflation and speculation, is at risk of losing its effectiveness with the emergence of unregulated financial institutions. Theres a risk continuing on the current path. Its not an immediate risk, but its a present risk on a three- to five-year horizon that the main macroeconomic controls that they have at their disposal actually become much more diluted in their effectiveness.

WHY INDIA CONTINUES TO BE A SAFE REAL ESTATE INVESTMENT DESTINATION FOR NRIs
The factors that drive the sentiment amongst the Non-Resident Indians to invest in a property back home are many. The idea to have a base in the home country where one can return to is a prime reason that motivates the NRI buyer. Also, there are a growing number of NRI investors who look at India to get better appreciation on their investment. According to Knight Frank's recent Global Price House Index, though markets worldwide have been struggling with growth, Asia continues to outperform all other world regions as prices here rose on average by 8.0% in the last 12 months.

NO EASY BANKING ENTRY FOR NBFCS AS FINANCE MINISTRY SEEKS TOUGHER NORMS
The finance ministry has sought strict norms for non-banking finance companies, or NBFCs, that want to convert into banks or promote banks. The ministry has suggested that only those NBFCs, which have a minimum balance sheet size of Rs 10,000crore and gross non-performing assets of less than 5%, should be allowed to convert into banks or set up new banks. Various entities like Religare, Bajaj Finance, Mahindra & Mahindra, IL&FS and Shriram City Union Finance are mulling entering the banking space.RBI had in 2001 allowed an NBFC with a good track record to convert into a bank, provided it was not promoted by a large industrial house and satisfied the prescribed minimum capital requirement. The finance ministry has also opposed RBI's suggestion to restrict foreign direct investment in new banks. It says bringing down foreign investment limit to 49% from the existing 74% will send a wrong signal to investors.

INDIA WILL NOT ACCEPT ANY INTELLECTUAL PROPERTY TALKS OUTSIDE WTO: ANAND SHARMA
India will not accept any attempt made by groups of countries to discuss intellectual property rights outside the multilateral forum of the world trade organization, Commerce and Industry Minister Anand Sharma has said. Responding to questions on India's position on the proposed Anti-Counterfeiting Trade Agreement (ACTA), a new intellectual property treaty being framed by a group of developed nations, the minister said a few countries cannot get together and try to change what is and will always be a multilateral regime called the TRIPS agreement. If it (Trips agreement) has to be revisited in any stage in future, it will be only in multilateral forum the WTO, it cannot be done outside. India is opposed to the ACTA being discussed between countries such as

the US, Japan, Australia, the EU, Canada and New Zealand on the ground that the stringent intellectual property agreement being drafted would affect supplies from non-member countries too. The government aims at increasing the share of manufacturing sector from 16% to 25% of the GDP by 2020. Manufacturing contributes over 80% in the country's overall industrial production. The minister said that the Prime Minister will soon chair a meeting on the proposed policy which aims to set up integrated Greenfield mega-investment zones to attract global investment and latest technologies.

OBAMA CALLS FOR $3 TRILLION IN DEFICIT CUTS

President Barack Obama will call for new deficit cuts of $3.0 trillion but warn Republicans he will veto any bill that trims healthcare for the elderly without hiking taxes on the rich. Obama will lay out a series of proposals that include a broad overhaul of the tax code designed to raise $1.5 trillion dollars, mostly by letting previous tax cuts for the wealthy expire and by closing corporate loopholes. The plan would ensure America's long term fiscal future at a time of deep economic gloom, and permit continued investment in education, new generation energy and job creation. Specifically, Obama will lay out a plan for tax revenue raises and spending cuts which he will suggest a congressional super committee charged with coming up with up to $1.5 trillion dollars in spending cuts should adopt. Obama's proposals will bring total deficit cutting plans over the next decade to $4.4 trillion. That topline figure includes $1.2 trillion in cuts in federal discretionary spending already agreed by Obama in August as part of a compromise which ended a standoff with Republicans over raising the federal debt ceiling. It includes 580 billion in spending cuts across all mandatory spending programs and $1.1 trillion of savings realized from drawing down US troop numbers in Afghanistan and Iraq. Tax reform would result in 1.5 trillion dollars in savings, and a further 430 billion dollars will be found in additional interest savings elsewhere.

INDIA'S GREEN IT, SUSTAINABILITY SPEND TO REACH $70 B BY 2015

India's spending on green IT and sustainability initiatives will double from $35 billion in 2010 to $70 billion in 2015, according to Gartner, Inc., a leading IT research and advisory company. Although still buzzwords for many, they will soon emerge as top priorities for businesses, investors and technology professionals across industries and policymakers in India. India's information and communication technology (ICT) industry will be an early adopter of green IT and sustainability solutions as India is one of the fastest-growing markets in terms of IT hardware and communications infrastructure consumption. As enterprises embrace IT to improve productivity and drive growth, penetration of ICT infrastructure has been growing rapidly during the past decade, as has the energy consumption and resulting carbon emissions of India's ICT infrastructure. Apart from the ICT industry, the banking and financial services, hospitality, manufacturing (such as automobiles), pharmaceuticals, and other industries that have significant exposure to the export markets, will join the green IT and sustainability trend early in India. In other industries, addressing energy, carbon, resource efficiency and sustainable economic development is currently still in the early stages.

GOVT EASES NORMS FOR FII INVESTMENT IN INFRASTRUCTURE SECTOR (INFRASTRUCTURE SECTOR)
Under the revised norms, which would be notified by the market regulator Securities and Exchange Board of India (SEBI), FIIs would be allowed to invest up to $5 billion out of the total limit of $25 billion in long-term infrastructure bonds, with an initial maturity of five years and lock-in period of one year. The relaxation in guidelines follows low inflows of FII funds in corporate bonds. While the government on March 31, 2011, had raised the investment limit in such bonds from $5 billion to $25 billion (Rs 1.12 lakh crore), only $109 million (Rs 500 crore) has been received so far. SEBI last month had allowed Qualified Foreign Investors (QFIs) to invest up to $3 billion, out of the limit of $25 billion, in Mutual Fund Debt Schemes which invest in the infrastructure sector. Out of the remaining $ 22 billion, $5 billion could be invested by FIIs in long-term infrastructure bonds with an initial maturity of five-years or more at the time of issue and residual maturity of one year at the time of first purchase by FIIs. The government proposes to double investment in infrastructure sector to USD 1 trillion during the 12th Plan (2012-17).

GOVT SHOULD REVISIT SEZ POLICY: ASSOCHAM

The government should revisit the policy on special economic zones (SEZs), particularly matters related with taxation in order to make them attractive for domestic and global investors. Huge investments have been made in SEZs across the country and frequent changes especially relating to tax matters and land acquisition are eroding confidence among investors. The government had imposed 18.5% minimum alternate tax on SEZ developers and units besides 15% dividend distribution tax on developers. According to the revised DTC draft, which will replace the Income Tax Act of 1961, tax exemptions for SEZs will be confined to the existing units. Under the SEZ Act, SEZ units get 100% tax exemption on profits earned for the first five years, a 50% exemption for the next five years and another 50% exemption on reinvested profits in the following five years. SEZ developers, on the other hand, get 100% tax exemption on profits for 10 years which they can choose to invoke within the first 15 years of operation. Merchandise exports from the 143 operational SEZs in the country total Rs 72,255 crore in the April-June period, an increase of 23% vis-a-vis the same period last year.

S&P DOWNGRADES ITALY DEBT RATING

Standard & Poor's on Monday downgraded Italy's sovereign debt rating, citing economic, fiscal and political weaknesses in a fresh blow to Silvio Berlusconi's fragile coalition government. The rating agency said it had downgraded Italian debt to A/A-1'' from A+/A-1+'' grade because of Italy's weakening economic growth prospects.'' It added that Italy's weak governing coalition would limit the government's ability to respond decisively to events. We believe the reduced pace of Italy's economic activity to date will make the government's revised fiscal targets difficult to achieve,'' S&P said in a statement. It was more bad news for Italian Prime Minister Berlusconi who is under fire over the economy, in the courts and, increasingly, from the voters; his popularity plunged to 24 per cent in a September poll.

SHARMA PROMISES INDIAS RETURN TO DOUBLE DIGIT GROWTH

Addressing a 650-strong ballroom of dark-suited Indian-American business leader in the heart of the Deep South of the United States, Indias Commerce, Industry and Textiles Minister, Anand Sharma, promised Indias return to double digit growth after the wobbles of the global economic downturn and the shaky ongoing recovery. Further Mr. Sharma sought to allay concerns surrounding the controversy on outsourcing of U.S. jobs to India, arguing that for every job outsourced to India, two skilled and well-paid jobs were created on U.S. soil. In building this case he also made a plea to end a host of restrictive rules that made it difficult for Indian professionals in areas such as information technology to work in the U.S. Delivering a keynote address that touched upon wide-ranging issues from current counterterrorism concerns to shared values between India and the U.S. Mr. Sharmas overall thrust was to pitch for deepening commercial ties between the two nations corporate sectors.

ASIAN STOCKS STEADY AHEAD OF FED, EURO RECOVERS

Asian stocks held steady ahead of the conclusion of a two-day US Federal Reserve policy meeting in which Chairman Ben Bernanke is widely expected to announce further steps to stimulate a flagging economic recovery. The Fed is expected to announce plans to intervene in the bond market to push long-term interest rates -- already near historic lows -- even lower in a move known as Operation Twist. Stocks on Wall Street drifted lower overnight as earlier enthusiasm about an euro zone debt crisis resolution faded although Apple Inc shares hit an all-time high. European debt worries were tempered to some extent after Greece promised further cuts to its public sector before a second conference call with international lenders that Athens must persuade to extend more loans to avoid bankruptcy next month. That relief helped the beleaguered euro strengthen against the dollar, having fully recovered following a downgrade of Italy's credit rating. The euro rose more than a cent to $1.3711, from a low of $1.3591. The MSCI Asia ex-Japan index of stocks was trading 0.1% lower in early trade. Japan's Nikkei was little changed and was expected to stick to a narrow range through the day. In commodity markets, spot gold hovered around $1,800 an ounce after a 1.4% rally in the previous session. Brent crude futures held steady around $110.50 a barrel ahead of the Fed meeting.

THE DERRICK

INDUSTRY WATCH
NATURAL GAS SECTOR: BIG COS TO REAP BENEFITS FROM PIPELINE NETWORK
The domestic city gas distribution companies have witnessed an unwavering and growing investor confidence over the past couple of months even though the overall equity markets are in doldrums. Indraprastha Gas (IGL) and Gujarat Gas have emerged as steadily growing companies with robust business model and strong balance sheet. Both these companies are reaping the benefits of widespread infrastructure they created over past several years. Both enjoy strong cash flows with over 35% return on employed capital (RoCE), paying regular dividends and reporting double-digit growth quarter after quarter. Still their valuations differ markedly. IGL trades at P/E above 21 while that of Gujarat Gas is around 18. This is despite the fact that Gujarat Gas is bigger in terms of volumes. The reason lies in their risk profiles. A large chunk of the gas that IGL retails has been allotted to it on priority basis and comes at a cheaper rate. In comparison, the bigger companies in the natural gas transportation business Gail and Gujarat State Petronet (GSPL) have not done as well in the recent turmoil. Both are setting up large pipeline network. However, the infrastructure will be optimally utilized only after availability of natural gas in India improves over the next few years. The premium valuations of the city gas distributors appear justified, but at the same time are too high. Long-term investors should, therefore, do well to prefer the larger players that will benefit as their growing pipeline network starts getting gas.

CHINA TO EXPAND SEABED MINING IN INDIAN OCEAN

China rolled out the plans to expand its seabed mineral explorations in the Indian Ocean after an international authority approved its bid to mine for polymetallic sulphide ore, much to the surprise of India. Beijing has approval to explore in a 10,000 sq km seabed area in southwest Indian Ocean for the ore and now it plans to invest more to expand the depth and scope of oceanic research. Following the approval, Chinas Ocean Mineral Resources Research and Development Association is set to sign a 15-year exploration contract with the International Seabed Authority (ISA) later this year granting pre-emptive rights for it to develop the ore deposit in future, state-run Xinhua reported. The move has raised concerns in India with the Directorate of Naval Intelligence (DNI) informing the Indian government that the contract would provide an excuse for China to operate its warships besides compiling data on the vast mineral resources in Indias backyard. Chinese released a guideline on the oceanic science and technology development between 2011 and 2015, vowing to invest more to boost the countrys maritime economy. More efforts will be made to boost innovation and strive for breakthroughs in key technology in order to stimulate the development of emerging oceanic industries but did not mention the amount money China will be investing.

RETAIL INVESTORS CONTRIBUTE 60% OF US INDEX FUTURES TRADING

About 60 per cent of the volume traded in American indices the NSE launched recently, futures and option contracts for S&P 500 and futures for DJIA, has been from retail investors and high net worth Individuals. Proprietary trading contributes to the rest. About 50 per cent trading is coming from Mumbai, 22 per cent from Kolkata; about 18 per cent from Delhi and 4 per cent each from Chennai and Ahmadabad. The rest is spread across other metropolises. More than 50 per cent of existing equity derivative members has traded at least once in the new products. Domestic institutional investors, which form a minor part of investors into derivatives, are eligible for participation in the segment. But none has participated as of now.

HOUSING PRICES LIKELY TO GO UP BY 15-20 %: REALTORS

With the Reserve Bank effecting a 25-basis point increase in key rates the cost of housing and housing loans was likely to go up by 15 to 20 per cent on account of an expected rise in the developers' borrowing costs. However, major realtors felt that this would not impact the demand for housing much especially during the festive season. Interest rates on home loans as well as on developers' borrowings were bound to go up. Housing prices, which had gone up by 15-20 per cent in the last one year, would further increase as we were not left with no choice but to pass on the same to buyers. The housing prices will rise by 30-50 per cent, depending on the location, once the proposed Land Acquisition Act is passed by Parliament. Country's largest real estate firm DLF Executive Director Rajeev Talwar said housing prices might go up as cost of financing the project would rise. On the demand side, he said, the prospective buyers would be discouraged to buy property with rising EMI on home loans.

OIL COMPANIES HIKE ATF PRICE BY 2.5 PER CENT

After two consecutive price cuts, state-owned oil companies hiked jet fuel, or ATF, price by 2.5 per cent in line with firming of international oil rates. Aviation Turbine Fuel (ATF) price at Delhis T3 airport was hiked by Rs. 1,429 per kilolitre, or 2.5 per cent, to Rs. 57,689 per kl. The IOC and its sister retailers, Hindustan Petroleum and Bharat Petroleum had in two rate cuts on August 16 and September 1 lowered jet fuel price by Rs. 1,585 per kl. ATF in Mumbai, home to the nations busiest airport, will cost Rs. 1,475 per kl more at Rs. 58,452 per kl as against the old price of Rs. 56,978 per kl. Jet fuel makes up for 40 per cent of an airlines operating cost. No comment could be immediately obtained from airlines on the impact of the price hike on passenger fares. ATF prices vary from airport to airport, depending on the local sales tax or VAT. The three fuel retailers revise jet fuel prices on the first and 16th of every month, based on the average international price in the preceding fortnight.

SECTOR TO SLOW DOWN

Rising input and interest costs will slow the manufacturing sector's growth in the coming quarters of fiscal 2011-12, leading industry lobbies. A survey conducted on 324 manufacturing units by the Federation of Indian Chambers of Commerce and Industry (FICCI) showed an overall slowdown in the business sentiment of the manufacturing sector in the second quarter. Areas such as investments, capacity utilization and employment have shown a declining trend. High interest rates have affected demand as well. 'A significant fall in the order books is seen in the second quarter.' In order to cop up with the situation 'The government needs to speed up the reform agenda in order to get the manufacturing sector back on track. The policy is expected to create 100 million jobs in the next decade. CII's survey, conducted on 3,500 companies engaged in various manufacturing activities, revealed a decline in a number of sectors. Only 10.5 percent of the companies, which participated in the CII survey, said that their sectors were growing at more than 20 percent.

THE DERRICK

FACTS OF THE WEEK

1. Rice exporter Kohinoor Foods today said it had completed the Rs 520-crore deal with US-based spice maker McCormick to set up a joint venture for marketing basmati rice and other food products in India. 2. Dell has acquired the U.S.-based $200 million revenue networking company Force 10 Networks. Force10 Network's Chennai research and development team will be significantly ramped up over the next 12 months to play a crucial part for Dell's networking business. 3. Tata Consultancy Services and Felda Prodata, Malaysia's most diversified agro-based enterprise, have announced the signing of a collaboration agreement to jointly develop and deliver strategic information technology services and solutions to the Malaysian market. 4. German carmaker Volkswagens Czech unit, Skoda Auto, today said its new compact car MissionL will be launched in India by the end of this year. 5. A joint venture of BGR Energy and Hitachi to get orders worth Rs 3,600 crore from NTPC Ltd for the supply of super-critical steam turbine and generators has led the Chennai-based company to emerge as the winner for supplying nine units of stem turbines. 6. Infrastructure developer GVK group on Friday said it had acquired a strategic part of a large coal resource and infrastructure development project from Hancock Prospecting in Queensland, Australia, for $1.26 billion. 7. The owners of Pothys, a chain of textile showrooms in south India, has acquired a prime property in Chennai for around Rs 60crore. This would be the second biggest property deal in the city in the last three months after India Cements MD's Rs 90crore deal in posh boat club area. 8. General Motors Co. and the United Auto Workers reached a tentative agreement on a new four-year contract late Friday. 9. Details werent immediately released, but the union said the contract will ensure that laid-off workers will be hired back. The union said the contract also will improve health care benefits and profit-sharing plans. 10. The Future Group has joined hands with the Himachal Pradesh Government for a strategic partnership to promote Brand Himachal', aimed at developing various source-to-market initiatives and facilitate for creating livelihood for over 25,000 families in the State. 11. Reliance Communications (RCom) and the China-based Coolpad Overseas, rolled out a fully loaded Android (clair) CDMA phone, D530, in Tamil Nadu. 12. Nokia on Thursday announced the launch of its most affordable Nokia 101 dual SIM music and Nokia 100 single SIM phones in India, priced at Rs.1,699 and Rs.1,399, respectively. 13. Tata Steel has announced a major five-year improvement programme for its IJ muiden steelworks in the Netherlands that is designed to sustain the plant's potential to be a world-class steelmaker. It is intended that this programme will be accompanied by a substantial investment that may total around 800 million euro (about Rs.5200crore) over the five-year period.

THE DERRICK

INTERVIEW
MITUL KOTECHA, CREDIT AGRICOLE CORPORATE & INVESTMENT BANK

The rupee slipped to a near two-year low against the dollar, as the euro zone crisis worsened, weakening the euro and emerging market currencies. Mitul Kotecha, managing director and head (global exchange research), Credit Agricole Corporate & Investment Bank, in an interview with Malvika Joshi, says the rupee stares at the risk of touching the psychologically important level of 50. Edited excerpts:

The rupee has been depreciating against the dollar sharply since the beginning of this month. What do you think are the reasons?
The rupee has been particularly susceptible to risk aversion. This partly reflects Indias reliance on capital flows. Recent datalike that on tradehave also not helped. As risk aversion has risen, the rupee has weakened and the currency is likely to remain under pressure, given the likelihood of risk aversion remaining elevated.

What is your short- and long-term outlook on the rupee?

The rupee is set to remain under pressure over the short term, since the global risk appetite continues to worsen. Worries about the euro zone periphery and the US economy suggest the risk appetite would not improve quickly. Consequently, if the pace of the weakness of the rupee continues, there is a risk that the rupee touching the psychologically important level of 50. Over the medium term, I believe the current weakness would prove transitory, and I expect the rupee to strengthen to around 45.40 against the US dollar by the end of this year and 42.90 by the end of the next year.

The floor has been set for the Swiss franc against the euro. How do you think this would change India Incs fund-raising pattern?
I think the floor for the euro/Swiss franc would deter many Indian and global investors from utilising the Swiss franc as a safe haven currency, as they shift from holding the euro.

What should the Reserve Bank of India (RBI) do to maintain a balance between exchange rate stability and its aim to make the capital account fully convertible?
If the drop in the rupee is extreme, RBI may be forced to take other measures to limit speculative trading in the currency and ensure stability. However, as long as such measures are seen as temporary, this should not interfere with the aim of capital account convertibility eventually.

Do you think RBI would intervene sometime soon to stop the rupees free fall?
As with other central banks in Asia, RBI may be inclined to intervene in the foreign exchange markets to prevent too much volatility in the rupee. If the currency's drop continues to accelerate, RBI is likely to intervene.

What strategy should be adopted by Indian export and import firms for currency hedging, given the current global economic uncertainty?
The rupee is likely to remain vulnerable in the short term, which could be costly for importers. Hedging against further weakness of the rupee may be necessary in the current environment. Assuming we are correct, the rupee should strengthen and this suggests such hedges should be undertaken to limit short-term foreign exchange risks. Conversely, exporters would benefit from the rupee's weakness. But they may seek to take the opportunity of short-term weakness of the rupee to hedge their long-term exposures.

Reports have surfaced that the Yuan would be strong in the next few years and may act as a hedging currency. Do you think this is possible, given the large Chinese exports to the US and its large reserves of the dollar?
We expect the Yuan to continue to strengthen over the coming months and years, while the Chinese authorities move towards greater internationalisation of the currency. The use of the Yuan in international trade and hedging is still relatively small, but is expected to grow over the coming years, as China edges towards full capital account convertibility. Ultimately, China would reduce its reliance on the US dollar.

(This circulation is just for education purpose)

THE DERRICK

ZARGONOMY
COLLAR:
This is a term used to describe an options strategy in which both Call Options and Put Options are used to put a "collar" around an investment position. For example, by simultaneously writing near-the-money calls and buying near-the-money puts, one can lock in a share price range (until the options expire) regardless of the market's vagaries.

COMMON SHARE
A common share is the standard for of ownership in an incorporated company. Common shares allow the holder to vote his/her shares. Each share gets one vote at a meeting of shareholders. Each share entitles the holder to participate, pro-rata, in profits of the company. Hence, Common shares are usually voting, participating shares.

CRAMDOWN
When investors get heavily diluted by a subsequent round of investment especially when the investment is a down round. Also known as a washout.

DOWN ROUND
This is an investment round that is done at a valuation substantially below previous ones, often excessively diluting earlier investors.

LEAPFROG
To surpass your competition, usually by engaging in one gigantic, hopelessly ambitious leap of faith that is almost sure to end in ruin and despair. Bring a parachute, golden or other.

TERMS SHEET
This is a document outlining the investment terms of a particular investment opportunity. It defines the terms and conditions of an investment, usually as dictated by an investor. It is the negotiating document that the parties must jointly agree to before a definitive investment agreement can be drafted.

TSE300
(Also TSE100 and TSE35) - An index for shares trading on the Toronto Stock Exchange, i.e. the TSE300 is a collection of 300 companies and is a measure of how the TSE "market" is performing. This index has been replaced by the Standard & Poor's TSX Index.

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COLUMNIST
BLUETOOTH MARKETING: THE NEXT BIG THING IN THE MARKETING ARENA

(PART II)

Mr. Abhishek Dutta Technological Know-How

Coming to some of the technological know-hows of Bluetooth, the most important part is the Bluetooth server which is installed at very individual hotspot location. These servers act as central point of connectivity through the Bluetooth hubs spread across the location. These servers are pretty fast since Bluetooth work on short waves and require very less processing power. Some of the key benefits of these servers are: Can be programmed to recognise and ignore handsets that have already downloaded information previously. Small, light and can be installed virtually anywhere Lottery function: Means out of the connected device a single device can be selected on the basis of random selection. Moreover these servers can send nearly all types of files across through a Bluetooth adapter.

Bluetooth Server

Fig.2. Bluetooth Server and adapter with devices to connect

Bluecasting
The process of broadcasting information through Bluetooth is also known as bluecasting. Few of the drawbacks of Bluetooth technology which is hindering its usage at all times are firstly, the power consumption is very high which results in draining of the battery of the handheld device in a very short time. Hardly a fully charged mobile phone can utilize Bluetooth transmission for 1-1.5 hours. Companies across the world are heavily researching over this point to make Ultra low power Bluetooth, which could change the way Bluetooth is used today. It could be embedded into wristwatches which run on very low power batteries. Secondly, the issue of security is another concern. Many analysts claim Bluetooth to be vulnerable to virus attacks. But, if we see it in other way, Bluetooth is also one of the safest ways of data transfer because any information or file transferred over the Bluetooth requires the users authentication. Thirdly, the speed of transfer is also a big issue since presently the data transfer speed over Bluetooth is very low i.e. only 1MB per second at the maximum. Bluetooth 2.1 version gives a better ability to pair with other Bluetooth enabled devices. Whereas, the latest development in this field is Bluetooth 3.0 is all about high speeds. It is assumed that Bluetooth 3.0 can provide a data transfer speed of 130 times of what current Bluetooth devices provide. Bluetooth 2.0 was about enhanced data rates, 2.1 are about pairing bluetooth devices better. But 3.0 is about high speed, it could even transmit 130 times higher than current data rates.

Induction in Indian Scenario

In India the increase of Bluetooth enabled devices have increased manifold over the last few years mostly of these devices are mobile phones. We can see people sharing pictures, music and video over Bluetooth with one another anytime, anywhere. The country is among the fastest growing mobile telephony markets in the world, adding about two million subscribers in a month. Some of the places where Bluetooth technology can be used is, Railway Stations across India. The setup of these Bluetooth adapters is not very costly since the Bluetooth have been around us for a while and the cost of production has got cheaper. Coming back to Indian Railways, imagine that you are standing on Platform No.17 at Howrah Station (The largest Station in India with over 25 platforms), every time you need to check on the platform number where the train is about to arrive or how late the train is from its scheduled timing you need to rush back and forth to the display screen fitted in some part of the platform. Now with the use of Bluecasting we can receive information regarding all the trains that the arriving or leaving the station along with the timings. No more standing in queue at the enquiry counter and no more shuttling between the screen and the place whether all your bags and luggage are kept. This is the public information transmission model which would of course be free but, as far as Indian Railways is concerned it can also earn revenues through Bluecasting. Very simple of course by just adding advertisements and downloads for different companies which would like to advertise. Some other spots for advertising could be hoardings. With bluecasting technology hoardings can become interactive. As soon as someone gets near to the hoarding or the banner advertisement the person would receive information through Bluetooth regarding the product or service displayed. The user may also receive games, interactive content on their smart phones so that it may spread like word of mouth or better said today as viral marketing.

Hence, what we see is that the Bluetooth marketing can become a stepping stone for the marketers to penetrate the market even better. Though they may use any marketing tool at the front end but in the back end Bluetooth marketing will propel these activities with much more boost than ever. With more and more people having access to Bluetooth enabled devices in India, the marketers are open to another parallax of marketing and henceforth, an additional thrust to engross the audience with the product/ service. The world is becoming an infinitely smaller place now with access to any information and service at the touch of a button and marketers will have to reap the benefits of this technology. There might be some disadvantages and drawbacks to this technology like any other and many critics may call it as breaching the privacy but, after all its science that we are using here and as it is rightly said that Science is like Frankenstein monster, who may strike back to its developer if not handled judiciously and righteously.

(Author is currently serving as an Assistant Professor in Lovely Professional University. Phagwara, Punjab. Had worked with banking industry for two and half years before joining academics; He is also an alumni of IBS Hyderabad).

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JOB WATCH
1. ONGC RECRUITMENT 2011 ONLINE APPLICATION FOR 312 A1, A2 LEVEL, AND FIELD OPERATORS POSTS Age limit: The age limit is minimum 18 years and maximum 30 years for general candidates as on 1510-2011, age relaxation as per rules. Application fee: The application fee of Rs 200/- for GEN/OBC candidates and Rs 50/- for SC/ST/PWD/EXSM candidates through challan. Important dates: Opening date for Online Registration: 20-09-2011. Closing date of Online Registration: 15-10-2011. Last date of Receipt of completed Application Format with relevant documents by Post: 28-10-2011. Tentative Date of Written Test: 27-11-2011 Read more: ONGC Recruitment 2011 - Online Application for 312 A1, A2 Level, Field Operators Posts | FreeJobAlert.com http://www.freejobalert.com/ongc/18768/#ixzz1YbXk6Kqc

2. RECRUITING FRESHERS, CAPGEMINI KOLKATA Education requirement: B.E./B.Tech/MCA / BBA/MBA/B.Com/M.Com /MA/BA Any Graduate. Experience: 0 Years For more details: http://www.indianfresher.com/50949-Recruiting_Freshers_job.html

3. UNION BANK OF INDIA ONLINE APPLICATION FORM 450 CREDIT OFFICER POSTS 2011 Total no. of posts: 450 posts Name of the posts: Credit Officer MMGS III: 450 posts Age limit: The age limit of the candidates is minimum 21 years and maximum 40 years as on 12-092011, age relaxation as per rules For more details: http://www.freejobalert.com/union-bank-of-india-online-application-form/12857/

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ENTREPRENEUR
Kushal Pal Singh or K.P. Singh (Born 15 August 1931) is a real estate mogul and the chairman and CEO of DLF Limited, India's largest real estate developer. It has an estimated land bank of 10,255 acres (42 km2) with about 3,000 acres (12 km) being in Gurgaon called DLF City.

Background
Born on August 15, 1931 in Bulandshahar, Uttar Pradesh in a Jat family (Tewathia Gotra), K.P. Singh, established India's largest real estate company. DLF has now become the world's largest real estate company in terms of revenues, earnings, market capitalisation and developable area. A graduate in science from Meerut College, Uttar Pradesh, and Mr. K.P. Singh pursued Aeronautical Engineering in UK, being subsequently selected to the Indian Army by British Officers Services Selection Board, UK. He was commissioned into the renowned cavalry regiment of The Deccan Horse of the Indian Army. In 1960, he joined American Universal Electric Company and soon after its merger with DLF Universal Limited in 1979, he took over as the Managing Director of this new company.

Positions Present positions:

Chairman of the Board, DLF Limited. Chairman and Director of 31 different private companies engaged in various sectors of the economy. MeCommerce & Industry (FICCI). Member of Delhi Vision Group to overview the Master Plan of Delhi 2021. Honorary Consul General, Principality of Monaco.

Positions held:
President of the apex industry chamber of the country, Associated Chamber of Commerce & Industry of India (ASSOCHAM). President of the PHD Chamber of Commerce and Industry. Director of Central Board, Reserve Bank of India (RBI).

Achievements:
KP Singh made Gurgaon a world-famous outsourcing destination within 10 years, because of his world-class earthquake-proof office buildings, apartments, shopping malls and leisure facilities (including the DLF Gary Player designed Golf Course). In 2008 he was briefly the world's richest real estate tycoon.

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UPCOMING EVENTS

CASE STUDY COMPETIETION . A CHALLENGE FOR THE MANAGEMENT STUDENTS 1) PARTICIPANTS:- All the management students can participate. 2) REGISTRATION: - Registration will be opened from 14th September to 20th September. Whosoever is interested can register them online on the UMS or can seek the coordinators of SYNAPZ for registration form. 3) EVALUATION PARAMETERS: - The person will be evaluated on the different parameters. a) b) c) d) Feasibility and sustainability Originality Strategies adopted. Scalability

4) PROCESS: - There will be a proper process which will be followed in order to judge the calibre of the student. a) ROUND 1:- In first round a case study will be given to each team and team should submit the write up to the SYNAPZ CLUB coordinators and the shortlisted candidates will be informed and will go for second round. Last date for submission of the write up is 24th September 2011. b) ROUND 2:- In 2nd round there will be 6 teams who will present a PPT on the same case in front of a panel of judges comprising of senior faculty members.

5) PRIZES: - Two prizes will be awarded. Top 6 teams will get certificates. a) Winners will be awarded with Rs. 1000 b) Runners Up will be awarded with Rs. 500 Registration form is available on UMS. Participants can send the filled forms at synapzclub@gmail.com OR Contact us at: +919256438739

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